Deep State: a Shadow Gov’t … Not Up for Re-Election

This 2014 excerpt of Alternet, Feb 21, is by Mike Lofgren, a former congressional staffer on both the House and Senate budget committees, possessing a top secret security clearance.

The Deep State operates regardless of who is formally in power.

President Obama cannot enact his domestic policies and budgets; because of incessant GOP filibustering, not only could he not fill the large number of vacancies in the federal judiciary, he could not even get his most innocuous presidential appointees into office. This strategy amounts to congressional nullification of executive branch powers by a party that controls a majority in only one house of Congress.

Despite this apparent impotence, President Obama can liquidate American citizens without due processes, detain prisoners indefinitely without charge, conduct “dragnet” surveillance on the American people without judicial warrant, and engage in witch hunts against federal employees (the so-called “Insider Threat Program”). Within the United States, the chief executive displays intimidating force of militarized federal, state, and local law enforcement. Abroad, President Obama starts wars without so much as a by-your-leave from Congress; he forced the landing of a plane carrying a sovereign head of state over foreign territory.

We have heard very little from Republicans about these actions — with the exception of Senator Rand Paul of Kentucky. Democrats, too, permit perjured testimony under oath by executive branch officials on the subject of illegal surveillance.

When there was heated debate about the budget crisis, our government committed $115 million to keeping a civil war going in Syria and to pay at least £100m to the United Kingdom’s Government Communications Headquarters to buy influence over and access to that country’s intelligence. Since 2007, the government has spent $1.7 billion constructing a building in Utah that is the size of seventeen football fields for the National Security Agency to store a yottabyte of information, the largest numerical designator computer scientists have. A yottabyte is equal to 500 quintillion pages of text.

There is another government behind the one visible at either end of Pennsylvania Avenue. It’s a hybrid entity of public and private institutions. Its operators — the people who are, to quote George W. Bush, “the deciders” — mainly act in the light of day.

“Groupthink” — the chameleon-like ability of people to adopt the views of their superiors and peers — is endemic to Washington. As in the military, everybody has to get on board with the mission, and it is not a career-enhancing move to question the mission. As Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

After a while, a functionary of the state begins to hear things that, in another context, would be quite remarkable, or at least noteworthy, and yet they simply bounce off one’s consciousness like pebbles off steel plate. It is easy to grow immune to the curiousness of one’s surroundings. To paraphrase the inimitable Donald Rumsfeld, I didn’t know all that I knew, at least until I had had a couple of years away from the government to reflect upon it.

The Deep State is a hybrid of national security and law enforcement agencies: the Department of Defense, the Department of State, the Department of Homeland Security, the Central Intelligence Agency, and the Justice Department. We also include the Department of the Treasury because of its jurisdiction over financial flows, its enforcement of international sanctions, and its organic symbiosis with Wall Street. All these agencies are coordinated by the Executive Office of the President via the National Security Council. Certain key areas of the judiciary belong to the Deep State, like the Foreign Intelligence Surveillance Court, whose actions are mysterious even to most members of Congress. Also included are a handful of vital federal trial courts, such as the Eastern District of Virginia and the Southern District of Manhattan, where sensitive proceedings in national security cases are conducted. The final government component (and possibly last in precedence among the formal branches of government established by the Constitution) is a kind of rump Congress consisting of the congressional leadership and some (but not all) of the members of the defense and intelligence committees.

The Foreign Intelligence Surveillance Amendments Act of 2008 retroactively legalized the Bush administration’s illegal and unconstitutional surveillance and indemnified the telecommunications companies for their cooperation in these acts. The bill passed easily: all that was required was the invocation of the word “terrorism” and most members of Congress responded like iron filings obeying a magnet.

What is euphemistically called private enterprise is an integral part of its operations. There are now 854,000 contract personnel with top secret clearances — a number greater than that of top secret-cleared civilian employees of the government. Since 9/11, 33 facilities for top-secret intelligence have been built or are under construction. Combined, they occupy the floor space of almost three Pentagons — about 17 million square feet. Seventy percent of the intelligence community’s budget goes to paying contracts. And the membrane between government and industry is highly permeable: the Director of National Intelligence, James R. Clapper, is a former executive of Booz Allen, one of the government’s largest intelligence contractors. His predecessor as director, Admiral Mike McConnell, is the current vice chairman of the same company; Booz Allen is 99 percent dependent on government business.

Wall Street supplies the cash that keeps the political machine quiescent and operating as a diversionary marionette theater. The executives of the financial giants even have de facto criminal immunity. They’re too big to jail yet the justice system has practically abolished the constitutional right to trial for poorer defendants.

General David Petraeus joined KKR (formerly Kohlberg Kravis Roberts) of New York, a private equity firm with $62.3 billion in assets. KKR specializes in management buyouts and leveraged finance; General Petraeus’s expertise in these areas is unclear; his ability to peddle influence, however, is a known and valued commodity. He also obtained a sinecure as a non-resident senior fellow at the Belfer Center for Science and International Affairs at Harvard. The Ivy League is the preferred charm school of the American oligarchy.

Silicon Valley is a vital node of the Deep State as well. Unlike military and intelligence contractors, Silicon Valley overwhelmingly sells to the private market; but its business is so important to the government that a strange relationship has emerged. While the government could simply dragoon the high technology companies to do the NSA’s bidding, it would prefer cooperation with so important an engine of the nation’s economy, perhaps with an implied quid pro quo. Perhaps this explains the extraordinary indulgence the government shows the Valley in intellectual property matters — if an American “jailbreaks” his smartphone (i.e., modifies it so that it can use another service provider than the one dictated by the manufacturer), he could receive a fine of up to $500,000 and several years in prison; so much for a citizen’s vaunted property rights to what he purchases. The libertarian pose of the Silicon Valley moguls has always been a sham. Silicon Valley has long been tracking for commercial purposes the activities of every person who uses an electronic device.

Washington, the headquarters of the Deep State, has been extracting value from the American people in vampire-like fashion. Within the Beltway itself, the richest metropolitan area in the nation, virtually every time there is a severe summer thunderstorm, tens — or even hundreds — of thousands of residents lose power, often for many days. There are occasional water restrictions over wide areas because water mains, poorly constructed and inadequately maintained, have burst.

As long as appropriations bills get passed on time, promotion lists get confirmed, black (i.e., secret) budgets get rubber stamped, special tax subsidies for certain corporations are approved without controversy, the gears of the hybrid state mesh. But when one house of Congress is taken over by the Tea Party, life for the ruling class becomes more trying. Sequestration, the government shutdown, and the threat of default over the debt ceiling extension have been disrupting that equilibrium.

Also, Silicon Valley is losing billions in overseas business from companies, individuals, and governments that want to maintain privacy. For high-tech entrepreneurs, the cash nexus is ultimately more compelling than the Deep State’s demand for “patriotic” cooperation. Even legal compulsion can be combatted: unlike the individual citizen, tech firms have deep pockets and batteries of lawyers with which to fight government diktat. Silicon Valley is now lobbying Congress to restrain the NSA, a core component of the Deep State. Some tech firms are moving to encrypt their data.

Ed. Notes: The above is how nations shed their empires. Afterwards, the ordinary people are better off. Check out the regular citizens of former European powers that have lost all their colonies. Without its huge parasite — the military/industrial complex that President Gen. Dwgiht Eisenhower warned Americans about — perhaps America can get back to being the beacon of freedom and progress for the lagging parts of the world. We can stay number one in exporting pop culture, if the world still will want it, and forget about being war mongers.

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Arts & Letters

Geonomics is …

the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

the Great Green Tax Shift maxed out”
Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net.
Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent. Better settlement patterns do reduce extraction upstream and pollution downstream.
Politically, green fees have less impact if applied locally; local is where grassroots movements have more impact. Yet getting rent usually entails shifting the property tax (or charging user fees), the province of local jurisdictions; both mayors and city voters have been known to adopt a site-value tax.
Ethically, putting into practice “tax bads, not goods” skirts the issue of sharing Mother Earth which collecting rent confronts head on. Since nothing is fixed until it’s fixed right, ultimately, greens must lead humanity into geotopia where we all share the worth of Mother Earth.

a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!

a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?

a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.